It's naive to think most restaurants and bars don't go belly up at some point. I've developed a mild curiosity in the wine bar business but am treading lightly. If I ever do decide to go this career route, I'm sure it won't be until I have piles of cash reserves to keep such a capital-intensive business afloat. When one brainstorms, I'm sure it's all too easy to dawn the rose-colored glasses that cloud one's view of what makes a successful business. It's a tough game out there, especially in Chicago. I know most people fail. I want to know why they fail. Thanks!

I used to live in Chicago years ago and had a friend tell me he recently stopped by Pops for Champagne. I was surprised that place was still open after all of these years. No idea of ownership changes, profitability, etc., but clearly they're doing something right.

Location Location Location is the first thing. I'm sure it's the same in all cities, but having been in NYC for 11 years now it's amazing how a particular spot just doesn't work out, whether it's a restaurant or bar, because of the location. I've seen storefronts at specific spots turn over 4-6 times now and nothing ever seems to work in that spot, regardless of the theme. Whether it's bad for foot traffic, or a bit too far off the beaten path, or too big a space and it just doesn't do enough volume to pay the rent, etc. etc.

Mark B wrote:Has anyone seen a BYOF wine bar? Perhaps focusing on a younger demographic and partnering with food trucks?

A lot of states tie in their liquor license with certain food requirements if you are on-premise versus off-premise. Breweries may not have the food requirements because they are selling their own creation, same as a winery. If you are purchasing wine through wholesalers to sell BTG to the public, you might be required to have food production on site. Maybe not, don't know Illinois liquor law, but that may be why nobody's done it before.

I've also seen some restaurants and bars in the city that sell consigned artwork. I always wondered how often a restaurant/bar moves their artwork and how much they usually take in through commissions.

Mark B wrote:I've also seen some restaurants and bars in the city that sell consigned artwork. I always wondered how often a restaurant/bar moves their artwork and how much they usually take in through commissions.

Less of a revenue maker, more of a 'contribute to the local art scene/free rotating ambiance' vibe.

Mark B wrote:I've also seen some restaurants and bars in the city that sell consigned artwork. I always wondered how often a restaurant/bar moves their artwork and how much they usually take in through commissions.

Less of a revenue maker, more of a 'contribute to the local art scene/free rotating ambiance' vibe.

It's also a way to decorate the walls of a business for "free," rather than invest $$$ in the business purchase of the artwork.

A restaurant/bar that sells much of the displayed artwork is more the exception to the rule. Most people who go out for a drink and/or a bite aren't usually
psychologically motivated to think about buying art at the same time.

Mark B wrote:I've also seen some restaurants and bars in the city that sell consigned artwork. I always wondered how often a restaurant/bar moves their artwork and how much they usually take in through commissions.

50% is the number I have heard and I know a few restaurants that do it. But it also depends on the artist and community. As mentioned above, it isn't as much a money maker as it is a a vibe, free way to decorate and, likely most importantly, supports the local art community.

Off the top of my head, the wine shops that I know have gone out of business both did so because of 1) lack of inventory-poor inventory and 2) poor service.

The markup for a glass of wine is like 4 times for a $20 glass of wine.

Not many people will drink too many $20 glasses of wine.

Well, it's not just the margins, but the setting. If you're in a nice restaurant setting, esp. one without BYOB, it's easier to convince people to pony up for a $20 glass of wine (esp. if the by-the-bottle pricing is on the high side). A smaller % of your customers are wine geeks, and a $20 glass of wine is "bargain" compared to $75-$100+ bottles of wine. By contrast, in a wine bar you have a higher % of wine geeks who will know the retail price. In addition, in many restaurants you can get by on just a limited number of BTG selections; obviously that doesn't work in a wine bar. Unless you're constantly pouring through entire bottles in a wine bar, that's a lot of vino that may go flat/dull after the bottle has been opened for a while.

Bruce Leiser_owitz wrote:Unless you're constantly pouring through entire bottles in a wine bar, that's a lot of vino that may go flat/dull after the bottle has been opened for a while.

Bruce

I think that risk has been somewhat lessened by devices such as Coravin and Pungo. Was talking to a chef and somm on Friday and they say it works great in their restaurant. If I'm a wine bar, I would be investing in some form of preservation equipment to reduce spoilage.

I like the idea of using those automated wine stations and constantly rotating out bottles. Although they are expensive out of the gate, they definitely cut down on employee payroll costs and virtually eliminate slippage and spoiled wine.

Let me throw a hypothetical out there. If you decided to rely solely on wine station machines, only selling btg, how many machines would yield a profitable outcome? I know some people think those machines are a money pit/ horrible idea, but just for s#!ts, let's say your bar had to rely solely on them. How many bottles (each machine holds 4) would you make available and how often would you mix up your selections?

I was also thinking of putting an empty in the front window of every wine you have on tap. Every time you swap one producer for another, you'd swap the display as well. Then, with social media, you can keep your followers up-to-date on your constantly rotating wines.

Hard to tell about the wine stations. The M Hotel in Vegas has (last time I checked) 200+ wines in those machines, in one room, and presumably does well. The first place (at least in the Western US to use them was Vino Venue (in SF) and they lasted maybe 5 years IIRC. Both of those venues have(had) little staff and it seemed to work for them. Both offer(ed) small tasting pours as well as glasses.

After working with one in a setting where the concept is to act like a wine bar inside a retail shop (tables and a small food menu) I think it works just fine for BTG, but our owners feel that people expect/prefer a more personal service so we do the BTG service for most guests, so no real staffing savings. IMHO people prefer to sit if they're drinking glasses, but are fine with standing for tasting pours (which are self-serve). I add that because I think that the tables can change the customer's expectation of the experience. Also............. most people want the personal touch of someone talking to them about the wines, so most don't seem to like self-serve BTG.

We have one 8-bottle unit. Except for 2 or 3 "house" selections the bottles turn fairly quickly. What goes in is a combo of new items, things we know will sell better if tasted, and last bottles (not the best idea if you want to use the unit to sell wine). How long they last is mostly a function of your traffic (with a clunker now and then).

Mark B wrote:Let me throw a hypothetical out there. If you decided to rely solely on wine station machines, only selling btg, how many machines would yield a profitable outcome? I know some people think those machines are a money pit/ horrible idea, but just for s#!ts, let's say your bar had to rely solely on them. How many bottles (each machine holds 4) would you make available and how often would you mix up your selections?

Had one of these in downtown Napa about 8 years ago. Lasted a little over a year. There was no parking near it and they had to rely on people walking/shopping downtown. They also never added anything as an attraction beyond 30 wine stations, some couches and chairs. Looked upscale but $35 for an ounce pour of Cabernet didn't go well.

As a caveat, we are a wine bar, with the wine bar ancillary to retail and on-line sales. We also sell cigars. It is not uncommon for visitors to the valley to come and want to "taste" wines and we have to explain we are a bar. Half of them are looking for free tasting or $25 for a flight of six wines.

A local wine tasting room, (two wineries), added live music 3 nights a week and turned a dying operation into a pretty active place thursday, Friday and Saturday.

IN THE BUSINESS SHILL: An associate of a person selling goods, who pretends no association to the seller and assumes the air of an enthusiastic customer.

If the 'x program' is some level of reasonably substantial good food I think the risk is less. When wine shop/bar after wine shop/bar around here closed in 2008-2010 it was the larger ones and the smaller ones that served some food that made it through. Not that the 'restaurant' business is easy, but at that time I think people were reluctant to spend maybe $40 or so to taste and then spend another $75+ somewhere else for dinner. Wine tasting plus small plates together made more sense.

I'd say have a strong 'x program' that happens to have a great wine selection. Vinyl sales are on the rise, what about a record store/coffee shop with a well curated BTG list?

we have a small wine bar/vinyl shop near us. we like it quite a bit.

one thing they have done to help their business is maintaining retail sales along with the "wine bar" and they also have a "wine club" where people sign up and buy 4 bottles of wine each month. not sure of the member count, but that is a good steady cash flow for them, plus keeps inventory moving.

one thing they have done to help their business is maintaining retail sales along with the "wine bar" and they also have a "wine club" where people sign up and buy 4 bottles of wine each month. not sure of the member count, but that is a good steady cash flow for them, plus keeps inventory moving.

Good point. We had no luck trying to start up a wine club in 2006-2008 but the people who bought our shop began that model in around 2010 and it is very successful today. Also............. at that point in time, we did quite a bit of business in on line wine sales, but that (I think) is more problematic today.

I read an article in Wine & Spirits years ago about an emerging model of wine shop + wine bar. You could buy BTG wines at the wine bar, or walk "next door" (through an arch) to the wine shop and buy a bottle to pop in the bar for a flat fee (~$15).

The incentive to buy pricier bottles at a 50% mark-up in the shop (+$15 corkage fee) was more enticing than buying a fancy wine at 100% mark-up in a standard restaurant.

I thought that this was brilliant! I mentioned it to a local wine rep, and he told me that our competition was in the midst of building such a place nearby.

8 years later, the Wine Country Bistro & Bottle Shop of Shreveport, Louisiana, is still alive and kicking.

The wine shop/wine bar model has been around California for a long time (20 years or more). As I said above, it too a major hit during the recession, but most of the ones that made it had a third component - food.

I would visit & interview owners of successful wine bars in different places. Perhaps none close to where you are thinking of opening one so you get honest answers. Learning from others, particularly those who are successful will help. Who knows, perhaps one will become your mentor.

Here in Portland, Oregon Wines on Broadway has a few elements that others have noted above that likely have contributed to its being open a while now. While others have come and gone since. They are only open noon-8pm!

From their website.We pour the best selection of Oregon Pinot Noir by the taste, the glass, the flight or the bottle. We sell bottles to go, ship wine all over, serve small plates to accompany your tasting and have a personalized wine club.

-- They only sell Oregon wines primarily pinot noir (36 choices, vs 4-8 whites)
-- They have a small bottle shop
-- They sell charcuterie & cheese & bread to pair with your wine
-- They offer some beer too (my take is a group of people might stay longer if one member prefers beer)
-- They are on a busy downtown street within easy walking distance of many hotels & employers & shopping (location matters)

That's true, but it could be the difference between success and failure.

One more thing....................... if the location is one where people walk by with children there's the issue (as in California) where a retail and tasting license combo requires that no one under 21 be allowed. If you can get a restaurant or 'general eating place' license, people can bring their kids in with them. In some scenarios that can make a big difference for bottle sales.

Mark B wrote:I like the idea of using those automated wine stations and constantly rotating out bottles. Although they are expensive out of the gate, they definitely cut down on employee payroll costs and virtually eliminate slippage and spoiled wine.

If you have at least one other strong sales person, you will rip through a bottle of something BTG per night.

I think adding the word "wine" in front of the word "bar" automatically limits your audience, and you alienate those that want a great beer or cocktail. If you create an up scale, classy bar that has an excellent wine program (thus allowing for a full menu), the concept absolutely works. Clients willing to go to an upscale location with drinks that are above the normal market price (but also not super sky high either) will naturally be a more sophisticated client. Their is a place fairly close to my house that is killing it with this concept (it is a restaurant, but the bar scene is where it's really at), and while the wine program has done fine so far, they are succeeding selling Lebanese wine and Finger Lakes Riesling by the glass, not an easy task for any suburban area of the country, NJ or not.

Curious Mark if you feel there's a real opening in Chicago - or are you considering elsewhere? I'm not sure what's around but there seem to be so many good bars already. I also noticed a big push in Food & Wine magazine for a new-to-me-at-least - wine bar The Lunatic, Lover and Poet in the West Loop but it looks like it hasn't opened?

Mark B wrote:Has anyone seen a BYOF wine bar? Perhaps focusing on a younger demographic and partnering with food trucks?

What about taking that idea one step further and have a wine truck that follows gathering of food trucks? You would need air conditioned storage for the truck, but you would be moving the product to the people and in theory only be paying for labor during a time you should have good traffic.

Mark B wrote:Has anyone seen a BYOF wine bar? Perhaps focusing on a younger demographic and partnering with food trucks?

What about taking that idea one step further and have a wine truck that follows gathering of food trucks? You would need air conditioned storage for the truck, but you would be moving the product to the people and in theory only be paying for labor during a time you should have good traffic.

That should make for a very interesting discussion with the Alcoholic Beverage Control department here in California which requires a specific location for licensing. I LIKE the idea, but those folks may lack sufficient creativity to embrace the concept. As far as I know they won't issue a license to a movable vehicle.

Mark B wrote:Has anyone seen a BYOF wine bar? Perhaps focusing on a younger demographic and partnering with food trucks?

What about taking that idea one step further and have a wine truck that follows gathering of food trucks? You would need air conditioned storage for the truck, but you would be moving the product to the people and in theory only be paying for labor during a time you should have good traffic.

That should make for a very interesting discussion with the Alcoholic Beverage Control department here in California which requires a specific location for licensing. I LIKE the idea, but those folks may lack sufficient creativity to embrace the concept. As far as I know they won't issue a license to a movable vehicle.

Interesting. They do issue licenses to temporary events like concerts on a lawn, or art shows in the street. But maybe you would have for a separate license for each stop you make which would no doubt be a PITA. Are there physical requirements to be met for any location getting a license?

David_S wrote:
Interesting. They do issue licenses to temporary events like concerts on a lawn, or art shows in the street. But maybe you would have for a separate license for each stop you make which would no doubt be a PITA. Are there physical requirements to be met for any location getting a license?

The wine/beer license requires a specific physical address and, depending on local jurisdiction, sometimes has quirky rules imposed imposing physical separation if it's within a larger space where you want people under 21 to be able to go. I know of one wine shop that moved one space over in a building so they had to get a new license and go through the whole qualification process again. Because of the address requirement, renting space can be tricky as you usually have to include a condition that your lease is voided if something beyond your own control keeps you from getting the license. While they DP issue day licenses, I think food trucks (though a REALLY good idea) are highly problematic for lots of reasons. At least in California.

The reason why you need a specific physical location for an alcohol license is that you have to give notice to the neighbors about the pending application so they can object (if they so desire) or request conditions to the license, etc. I think it's fair to say that some locations for a wine bar might be much less desirable to the neighbors than others.

Of course, there's the "beer bike" in San Diego, but you can't drink on board the group bike:

Service - I much prefer to speak with someone who pours, who knows about what is being poured (and more than just what's on a table-tent / shelf-talker), who I can generously tip who'll remember me and my preferences, and may just let me have a sip of something new they think I may enjoy without having to pay for it.

Value - I dropped out of a wine club because even with my "discount", I saw the same bottles sold at Costco for 20% less than my best price. I am (or try to be) educated in this arena.

Intrigue - I'm a simple guy that has learned / been introduced to a ton via this site. I really would rather not go and spend dollars to a bar for "run the middle of the mill road" juice.

Evolve - Change it up a bit. Please. Ok, really please.

Location is truly foundational in the hospitality industry but can be overlooked if the service is great, the value rocks, and the selection is legit.

- brick and mortar bar exists mainly to ANCHOR a culture and tone for the barnd, gives us a place to run instagram, FB live, and other promo out of to create a perception (this is done VERY well in the coffee culture, more so than wine bars so far.. but check our a place like Deus Ex Machina, Parlor Coffee in Brooklyn or Intelligensia or St Ali -- coffee brands that have retail spots that push a LIFETYLE perception)
- I would use online social media like Instagram with paid targeting to push the brand to the right consumers (targeting is awesome on the FB ad platform)
- my main money would be the core business of having a wine club to capitalize on the platform I have... and I'd want our own label, ideally vertical integration (again like coffee where a roaster will have a brick and mortar as the face of that brand) where the vineyard is ours or in an exculsive rights arrangement. DTC and club is the best margin there is.
- As I said, my profit center would mainly be our own label wines, with curated other selections too... but NOT the money we are turning at the bricks and mortar.. that's just there as a marketing anchor.

M Hoose wrote:Intrigue - I'm a simple guy that has learned / been introduced to a ton via this site. I really would rather not go and spend dollars to a bar for "run the middle of the mill road" juice.

Barry Paul Price wrote:If I did a wine bar today it would be this way:

- brick and mortar bar exists mainly to ANCHOR a culture and tone for the barnd, gives us a place to run instagram, FB live, and other promo out of to create a perception (this is done VERY well in the coffee culture, more so than wine bars so far.. but check our a place like Deus Ex Machina, Parlor Coffee in Brooklyn or Intelligensia or St Ali -- coffee brands that have retail spots that push a LIFETYLE perception)
- I would use online social media like Instagram with paid targeting to push the brand to the right consumers (targeting is awesome on the FB ad platform)
- my main money would be the core business of having a wine club to capitalize on the platform I have... and I'd want our own label, ideally vertical integration (again like coffee where a roaster will have a brick and mortar as the face of that brand) where the vineyard is ours or in an exculsive rights arrangement. DTC and club is the best margin there is.
- As I said, my profit center would mainly be our own label wines, with curated other selections too... but NOT the money we are turning at the bricks and mortar.. that's just there as a marketing anchor.

Barry Paul Price wrote:If I did a wine bar today it would be this way:

- brick and mortar bar exists mainly to ANCHOR a culture and tone for the barnd, gives us a place to run instagram, FB live, and other promo out of to create a perception (this is done VERY well in the coffee culture, more so than wine bars so far.. but check our a place like Deus Ex Machina, Parlor Coffee in Brooklyn or Intelligensia or St Ali -- coffee brands that have retail spots that push a LIFETYLE perception)
- I would use online social media like Instagram with paid targeting to push the brand to the right consumers (targeting is awesome on the FB ad platform)
- my main money would be the core business of having a wine club to capitalize on the platform I have... and I'd want our own label, ideally vertical integration (again like coffee where a roaster will have a brick and mortar as the face of that brand) where the vineyard is ours or in an exculsive rights arrangement. DTC and club is the best margin there is.
- As I said, my profit center would mainly be our own label wines, with curated other selections too... but NOT the money we are turning at the bricks and mortar.. that's just there as a marketing anchor.

House wines anchored by a deli, in a place that has a "brand" or lifestyle perception to it: Napa.

I had the same thought about this model sounding like V. Sattui. Also, many wineries I've been to in Northern Virginia seem to follow a model like this and sell almost exclusively direct to consumer. If you ever want to see a complete madhouse check out Barrell Oak Winery in VA about an hour outside of DC on a weekend afternoon (http://barreloak.com/).

Barry Paul Price wrote:If I did a wine bar today it would be this way:

- brick and mortar bar exists mainly to ANCHOR a culture and tone for the barnd, gives us a place to run instagram, FB live, and other promo out of to create a perception (this is done VERY well in the coffee culture, more so than wine bars so far.. but check our a place like Deus Ex Machina, Parlor Coffee in Brooklyn or Intelligensia or St Ali -- coffee brands that have retail spots that push a LIFETYLE perception)
- I would use online social media like Instagram with paid targeting to push the brand to the right consumers (targeting is awesome on the FB ad platform)
- my main money would be the core business of having a wine club to capitalize on the platform I have... and I'd want our own label, ideally vertical integration (again like coffee where a roaster will have a brick and mortar as the face of that brand) where the vineyard is ours or in an exculsive rights arrangement. DTC and club is the best margin there is.
- As I said, my profit center would mainly be our own label wines, with curated other selections too... but NOT the money we are turning at the bricks and mortar.. that's just there as a marketing anchor.

House wines anchored by a deli, in a place that has a "brand" or lifestyle perception to it: Napa.

Judging by the website, I see what you mean. I have never thought of that brand as having real cachet at a Napa level, but they are certainly doing what we said in terms of brick and mortar anchor a lifestyle brand that sells dtc at the back-end.

I actually think the Scribe people have a stronger lifestyle thing but they are not leveraging their brick-and-mortar opportunities as well as they could. I think they could become sort of a wine-version of Dean and Deluca if they wanted to, but focusing mainly on their own wines dtc as the main profit margin center.

I wouldn't argue with the success of V. Sattui (though I personally find them several rungs below their Napa neighbors in wine quality) but I'd hardly call it a wine bar in terms of how this discussion started. It's more like the difference between opening a craft beer bar that sells a range of beers at a 'retail' level and opening a brewery that has an attached bar (usually those only sell their own brews, but I suppose wouldn't necessarily have to be limited that way).

The winery/brewery model is, to say the least, a lot more expensive to do and also requires more staff and or product knowledge. The profit margin on house product is definitely higher but the commitment is way greater.

I have owned 12 New York State Liquor Establishments in my last 45 years. A Federal Court would say I was an Expert! I made a few million here, and honestly, lost a few million in other places! I owned big rock clubs and disco's to fine supper clubs and Mall Restaurants. "Wine Only Bars" fail because (90%) of these spots only sell wine that is too expensive for the General Public! Most individuals who open Wine Bars are semi selective Wine Experts and do not comprehend the working American! Wine Bars are wonderful but you must also offer great decor, a few lap tops, and a few table video games, plus excellent Draft Beers, (no bottles) and a short fare that is easy on the pocket book! With the minimum wage creeping up, it will be harder! I have two nice spots that I am looking at in the upstate New York area, if you are interested! Both are nice communities, and both have under $1500 per month rents! I am a little slower now at 69 years old, but I know what I know because I am on record for big money and my Liquor File at the New York State Liquor Authority is self explanatory! Good Luck, Dr. Mike Crafthttp://www.wineberserkers.com/forum/#

This thread was initiated over a year ago and my impression is that wine bars are on an upswing in general now. I`ve seen many start ups across the country and they`re seemingly doing well. Yes, as has been stated herein, having at least small bites is the ticket.

In Europe, wine bars seem to be doing quite well, again with food also offered.

Board member Jim Coley has a champagne bar in KC and he`s got it together, again with small plates to complete the deal.

They fail when they have gnarly toilets.
But seriously, even if you have the location and demographic, where is the value-added? As others have noted, you can only mark-up a pour so much before the consumer is turned-off and there is no value-added because the consumer can pour the very same wine every bit as well at home. Contrast this to a chef who can take a simple 15 cent egg or 40 cents worth of pasta and create something the customer can't do at home. We were in Pops Chicago recently. I think it succeeds because of a tremendous ever-present flow of foot traffic and the value-added is a cool place to hang out while waiting for dinner. It offers higher-tier appetizers/small plates and an atmosphere of luxury. Few can replicate that. The only other wine bar I've enjoyed is Oregon Wines on Broadway. Like most things in Portland, it possesses the "Portland Cool" factor. It offers both insider type pinot and popular pinot by the pour and retail sales of bottles and the women behind the bar are exceedingly friendly-they feel like friends by the end of your first visit. Again, very hard to replicate.

Mitch,
You hit the nail on the head. I'm never happy paying more than retail for wine. I've been to wine bars and I either have to pay ridiculous prices or drink lousy wine that I would never purchase by the bottle. A good chef can do things I can't, a wine bar can't add much to that glass.